The Housing and Local Government Ministry (KPKT) is studying an option to purchase (OTP) mechanism that would replace the informal booking fee with a structured pre-SPA payment of up to 5% of the proposed price. If the developer then decides not to go ahead with the project, the buyer would get the full amount back together with the interest it earned. The developer would also have to keep to the indicative price it first offered. KPKT set out the proposal in a statement dated 15 October 2026. It has no implementation date yet, so every booking made today still follows the current rules.
This piece looks at what the proposal changes for someone about to book a new launch, why KPKT is pushing it now, and what you can do to protect yourself before it becomes law. For the wider policy background, including Build Then Sell and the Sunset Clause, see our explainer on Build Then Sell and the National Housing Policy 2026–2035.
The Proposal at a Glance
KPKT has described the mechanism in broad terms only. These are the points the ministry has actually stated, and the points it has left open.
| Item | What KPKT has said | Status |
|---|---|---|
| Buyer payment before SPA | Up to 5% of the proposed purchase price | Proposal under study |
| Developer’s decision window | A fixed period to gauge real demand before committing to build | Length not specified |
| If the developer does not proceed | Full refund of the payment plus accrued interest | Interest basis not specified |
| Price certainty | Developer must keep to the indicative selling price first offered | Proposal under study |
| Loan readiness | Buyers may submit financial information for loan assessment at the OTP stage | Proposal under study |
| Start date and legal framework | Not announced | Open |
The last row matters most. A proposal without a start date or a written framework gives buyers no legal protection yet, so treat the table as a direction of travel rather than a rule you can rely on.
Booking Fee Today vs the Proposed Option to Purchase
Most new launch buyers in Malaysia pay a booking fee to reserve a unit before the sale and purchase agreement (SPA) is signed. The housing regulations do not provide for this payment: under the statutory SPA, the first 10% of the price becomes payable when the agreement is signed, and the rules bar collecting money that the contract does not provide for. In practice the booking fee persists because both sides find it convenient, which leaves the buyer with very little formal protection.
| Question | Booking fee (current practice) | Option to purchase (KPKT proposal) |
|---|---|---|
| Legal footing | Not provided for in the statutory SPA | Would be a defined, regulated step before the SPA |
| Amount | Set by each developer | Capped at 5% of the proposed price |
| If the project is cancelled | Refund depends on the developer’s goodwill and paperwork | Full refund plus accrued interest |
| Price after booking | Indicative only; can move by launch day | Developer bound to the indicative price |
| If the buyer walks away | Fee often forfeited | Terms not yet published |
| Loan check | Usually after booking | Financial details can be assessed at the OTP stage |
One gap is worth flagging. KPKT’s October statement explains what happens when the developer pulls out, but it does not spell out what a buyer pays if the buyer is the one who withdraws. Until the ministry publishes those terms, nobody can say whether the OTP is cheaper or dearer for a buyer who changes their mind.
Why KPKT Wants to Replace the Booking Fee
The ministry’s reasoning runs in two directions. Developers currently read demand from booking fees, but a booking fee does not separate committed buyers from casual ones, so a project can look healthy on paper and still stall once real sales are needed. Buyers, for their part, can lose the fee if they withdraw, and can find that the launch price has moved away from the indicative figure they were quoted.
A larger, regulated payment with a refund guarantee is meant to solve both problems at once. The developer gets a firmer reading of demand before it starts spending on construction, and a weak project can be called off cleanly at the start instead of failing halfway through. KPKT has tied the proposal directly to its goal of reducing sick and abandoned private housing projects.
The Abandoned Project Numbers Behind the Proposal
The updated figures, given by Housing Minister Nga Kor Ming in a parliamentary reply on 14 October 2026, show how much ground the ministry has been covering, and how much remains.
| Measure (as of August 2026) | Projects | Units | GDV |
|---|---|---|---|
| Private housing projects revived since the task force began in 2023 | 1,726 | 199,643 | RM158 billion |
| Sick projects that have since received CCC | 1,542 | 163,621 | RM115.74 billion |
| Sick projects moved back to normal progress | 147 | 29,900 | RM40.92 billion |
| Abandoned projects completed or settled through buyer-backed schemes | 37 | 6,122 | RM1.504 billion |
Kuala Lumpur alone still had 7 abandoned private housing projects and 12 projects classified as sick as at 31 August 2026. Of the seven abandoned projects, five had revival plans, one was being revived and one had stalled. The government’s stated aim is to bring sick projects down to zero by 2030.
The revival count has also been climbing month by month: 1,576 projects in June, 1,647 in July and 1,726 in August. That is real progress, but the OTP proposal is an admission that rescuing failed projects after the fact is slower and costlier than stopping weak ones before buyers have signed anything.
What the Proposal Does Not Yet Answer
KPKT’s statement did not give an implementation date or a detailed framework. Several practical questions are therefore still open:
- How long the developer’s decision window will be.
- How the accrued interest on a refunded payment will be calculated, and who holds the money in the meantime.
- What a buyer forfeits, if anything, for withdrawing during the OTP period.
- Whether the 5% payment counts towards the 10% normally due when the SPA is signed.
- Whether the mechanism will be compulsory for all developers or offered as an option.
Until these points are settled in writing, the OTP is a policy signal. It is a useful one, because it shows the direction regulation is heading, but it does not change the paperwork in front of you today.
How to Protect Yourself When Booking a New Launch Today
Because the current system still applies, the practical steps below matter more than the proposal itself:
- Check the developer’s licence and advertising permit (APDL) before paying anything. A valid APDL is a legal minimum, not proof that the developer can finish the project, so look at its completed projects as well. Our new launch booking checklist walks through this step by step.
- Get the refund terms in writing. A verbal promise that the booking fee is refundable if your loan is rejected is hard to enforce. Ask for the condition to be printed on the booking form or receipt.
- Keep the booking receipt and its date. In the 2021 PJD Regency decision, the Federal Court held that late-delivery compensation runs from the date the booking fee was paid, not from the later SPA date, so that receipt can matter years down the line.
- Sort out your financing first. Knowing your borrowing limit before booking avoids losing a fee because the bank says no. See our guides on home loan approval rates and, if you have no payslip, the SJKP guarantee for self-employed buyers.
- Compare against completed stock. If delivery risk worries you, a completed or near-completed unit removes most of it. The trade-offs are covered in new launch vs subsale.
How This Fits With Budget 2027
The OTP proposal arrives alongside two Budget 2027 measures aimed at the same problem. First, the budget proposes a full stamp duty exemption on loan agreements and property transfers involving rescue developers and the original buyers of abandoned projects, which lowers the cost for a stronger developer to take over a failed one. Second, the first-home stamp duty relief has been extended for SPAs signed from 1 January 2027 to 31 December 2030, as explained in our Budget 2027 stamp duty guide.
KPKT has also said it has more funding in 2027 for big data analysis to match housing supply with demand, building on the data model described in our note on KPKT’s September 2026 housing measures. Taken together, the direction is clear: fewer projects launched on hope, more launched on proven demand.
If you are weighing a new launch in Kuala Lumpur, you can compare projects by area on our Cheras, Old Klang Road, Bukit Jalil and KLCC pages, or browse every listing on the properties page.
Frequently Asked Questions
How much would I pay under KPKT’s proposed option to purchase?
Under the proposal KPKT announced in October 2026, a buyer would pay up to 5% of the proposed purchase price before the SPA is signed. The ministry has not yet published the exact rules, so the final cap could change before the mechanism is introduced.
Do I get my money back if the developer cancels the project?
Under the proposed option to purchase, yes: if the developer decides not to proceed, the buyer would receive a full refund plus accrued interest. Under today’s booking fee practice there is no such statutory guarantee, so any refund depends on the terms written on your booking form.
Is a booking fee refundable in Malaysia?
The statutory SPA does not provide for a booking fee, and the housing regulations prohibit collecting payments that the contract does not cover. In practice, whether you get a booking fee back depends on what the developer has put in writing, so always ask for the refund conditions on the booking form or receipt.
Can the developer change the price after I book a new launch?
Today, an indicative price quoted at booking can move by the time the project launches. KPKT’s proposed option to purchase would require the developer to keep to the indicative price first offered, but that protection only applies once the mechanism is in force.
When will the option to purchase replace booking fees?
KPKT has not announced a start date or a detailed framework as of October 2026. The mechanism is still being studied, and every booking made now falls under the existing system.
How can I check if a housing project is sick or abandoned before booking?
Check the developer’s licence and advertising permit, the project’s reported progress, and whether it appears on KPKT’s list of delayed, sick or abandoned projects. Then look at the developer’s record on completed projects, because a valid licence alone does not show that a developer can deliver.